UK SMEs are owed £23.4 billion in late payments! SMEs are forced to wait a month beyond agreed payment terms. Delay in late payments to SMEs is accelerating and it is causing the economy to slow down by increasing the risks for small businesses to become insolvent. The recent data from multiple SME businesses had shown that Day Payments Outstanding(DPO) had been increasing gradually. The average DPO Outstanding is 80 days for many countries.
Similarly in Collection Complexity survey conducted in 180 countries have highlighted the difficulties faced by SMEs in all the countries. DPO’s for India and China are around 65 days and 92 days respectively while businesses in US wait for 51 days to get payments for delivered goods. Longer payment cycles imply small vendors are facing difficulties in managing the cash-flow within the business.